A response to openDemocracy’s ‘The Blindness of Using Venture Capital to Fight Human Trafficking’ 

Working Capital Fund takes on the problem of forced labor and exploitation in global supply chains with venture capital.

openDemocracy published an article titled ‘The blindness of using venture capital to fight human trafficking.’ As the only true venture capital fund making for-profit investments in the forced labor/worker rights space, this not surprisingly caught our attention. We thought it warranted a response.

The problem is simple to describe: supply chains are rife with labour risk, including widespread forced and child labour, underpayment of wages, unsafe workplaces, and restrictions on worker organizing. The private sector – brands, retailers, and suppliers — faces increasing pressure to understand and address these risks in its direct operations and extended supply chains, largely driven by tightening legal requirements in the US and Europe.

At the same time, the toolkit available to brands, retailers, and their suppliers is inadequate to this task. Social audits and voluntary codes of conduct are the interventions most frequently used at a large scale. The social audit approach has persisted for decades despite serious credibility and efficacy questions, and the common knowledge that it can not scale to meet the needs for visibility in high-risk production locations in lower tiers of supply chains.

Please read our full response to understand how we distinguish ourselves from venture philanthropy and hold ourselves accountable for impact.  We would welcome your feedback.